SeaStar Medical Holding Corp 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 100 ) 82 Consolidated Balance Sheets as of December 31, 2024 and 202 3 76 Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023 77 Consolidated Statements of Changes in Stockholders’ Deficit for the Years Ended December 31, 2024 and 202 3 78 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 79 Notes to Consolidated Financial Statements 81 73 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of SeaStar Medical Holding Corporation Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of SeaStar Medical Holding Corporation (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt About the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring operating losses and negative cash flows from operating activities since inception and expects to continue incurring operating losses and negative cash flows in the future. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as 74 well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ WithumSmith+Brown, PC We have served as the Company’s auditor since 2023. East Brunswick, New Jersey March 27, 2025 PCAOB ID No. 100 75 SeaStar Medical Holding Corporation Consolidated Balance Sheets As of December 31, 2024 and 2023 (in thousands, except for share and per-share amounts) 2024 2023 ASSETS Current assets Cash $ 1,819 $ 176 Accounts receivable 112 — Prepaid expenses 1,835 2,132 Total current assets 3,766 2,308 Other assets 892 1,205 Total assets $ 4,658 $ 3,513 LIABILITIES AND STOCKHOLDERS̕ DEFICIT Current liabilities Accounts payable $ 3,046 $ 4,372 Accrued expenses 3,188 1,523 Contract liabilities — 100 Notes payable, net of deferred financing costs 574 565 Convertible notes, current portion — 4,179 Liability classified warrants 33 2,307 Total current liabilities 6,841 13,046 Notes payable, net of deferred financing costs — 4,143 Convertible notes, net of current portion — 194 Total liabilities 6,841 17,383 Commitments and contingencies (Note 13) Stockholders̕ deficit Preferred stock - $ 0.0001 par value, 10,000,000 shares authorized at December 31, 2024 and 2023; no shares issued and outstanding at December 31, 2024 and 2023. — — Common stock - $ 0.0001 par value per share; 500,000,000 shares authorized at December 31, 2024 and 2023; 5,977,246 and 2,016,045 shares issued and outstanding at December 31, 2024 and 2023, respectively 2 1 Additional paid-in capital 137,379 100,863 Accumulated deficit ( 139,564 ) ( 114,734 ) Total stockholders̕ deficit ( 2,183 ) ( 13,870 ) Total liabilities and stockholders̕ deficit $ 4,658 $ 3,513 The accompanying notes are an integral part of these consolidated financial statements. 76 SeaStar Medical Holding Corporation Consolidated Statements of Operations For the Years Ended December 31, 2024 and 2023 (in thousands, except for share and per-share amounts) 2024 2023 Net Revenue $ 135 $ — Cost of goods sold — — Gross profit 135 — Operating expenses Research and development 9,105 5,973 General and administrative 8,872 8,237 Total operating expenses 17,977 14,210 Loss from operations ( 17,842 ) ( 14,210 ) Other income (expense) Interest income 101 — Interest expense ( 244 ) ( 1,081 ) Change in fair value of convertible notes ( 6,145 ) ( 5,380 ) Change in fair value of warrants liability ( 697 ) 545 Change in the fair value of the forward purchase agreement derivative liability — ( 1,308 ) Loss on extinguishment of convertible notes — ( 4,949 ) Other income — 151 Total other income (expense), net ( 6,985 ) ( 12,022 ) Loss before provision for income taxes ( 24,827 ) ( 26,232 ) Provision for income taxes 3 — Net loss $ ( 24,830 ) $ ( 26,232 ) Net loss per share of common stock, basic and diluted $ ( 6.63 ) $ ( 30.26 ) Weighted-average shares outstanding, basic and diluted 3,743,554 866,813 The accompanying notes are an integral part of these consolidated financial statements. 77 SeaStar Medical Holding Corporation Consolidated Statements of Changes in Stockholders’ Deficit For the Years Ended December 31, 2024 and 2023 (in thousands, except for share and per-share amounts) Stockholders̕ Deficit Total Common Shares Additional Accumulated Stockholders' Shares Amount Paid-In Capital Deficit Deficit Balance, December 31, 2022 618,452 $ 1 $ 67,739 $ ( 88,502 ) $ ( 20,762 ) Issuance of shares - equity line of credit 261,000 — 4,742 — 4,742 Issuance of shares - commitment fee for equity line of credit 8,754 — 1,000 — 1,000 Issuance of shares - conversion of convertible notes 913,910 — 10,410 — 10,410 Issuance of shares - exercise of warrants 118,207 — 1,651 — 1,651 Issuance of shares - vesting of RSUs 8,238 — — — — Issuance of shares - prepaid forward contracts 43,879 — 1,870 — 1,870 Forward purchase agreement derivative liability — — 11,521 — 11,521 Stock-based compensation 43,638 — 1,930 — 1,930 Net loss — — — ( 26,232 ) ( 26,232 ) Balance, December 31, 2023 2,016,078 $ 1 $ 100,863 $ ( 114,734 ) $ ( 13,870 ) Issuance of shares - conversion of convertible notes 600,770 — 10,215 — 10,215 Issuance of shares - exercise of warrants 352,074 — 3,960 — 3,960 Issuance of shares - equity offerings, net of issuance costs 2,974,745 1 21,244 — 21,245 Issuance of shares - stock issued for Board compensation in-lieu of cash 10,120 — 210 — 210 Issuance of shares - vesting of RSUs 13,136 — — — — Issuance of shares - stock issued for employee bonuses 10,323 — 73 — 73 Stock-based compensation — — 814 — 814 Net loss — — — ( 24,830 ) ( 24,830 ) Balance, December 31, 2024 5,977,246 $ 2 $ 137,379 $ ( 139,564 ) $ ( 2,183 ) The accompanying notes are an integral part of these consolidated financial statements 78 SeaStar Medical Holding Corporation Consolidated Statements of Cash Flows For the Years Ended December 31, 2024 and 2023 (in thousands, except for shares and per-share amounts) 2024 2023 Cash flows from operating activities Net loss $ ( 24,830 ) $ ( 26,232 ) Adjustments to reconcile net loss to net cash used in operating activities Amortization of deferred financing costs 102 48 Change in fair value of convertible notes 6,145 5,380 Change in fair value of forward purchase agreement derivative liability — 1,308 Change in fair value of liability classified warrants (exercised and outstanding) 697 ( 545 ) Stock-based compensation 887 1,930 Loss on extinguishment of convertible notes — 4,949 Change in operating assets and liabilities Account receivable ( 112 ) — Other receivables — 12 Prepaid expenses 297 ( 97 ) Other assets 313 — Accounts payable ( 1,281 ) 2,445 Accrued expenses 1,875 517 Other liabilities ( 100 ) — Net cash used in operating activities ( 16,007 ) ( 10,285 ) Cash flows from financing activities Proceeds from issuance of convertible notes 979 8,000 Payment of convertible notes ( 700 ) ( 400 ) Proceeds from issuance of notes payable 713 800 Payment of notes payable ( 5,402 ) ( 4,870 ) Proceeds from issuance of shares, net of offering costs 17,441 4,742 Proceeds from exercise of convertible note warrants 853 592 Proceeds from issuance of pre-funded warrants 3,766 — Proceeds from exercise of additional warrants — 180 Payment of commitment fee - equity line of credit — ( 500 ) Proceeds from sale of recycled shares — 1,870 Net cash provided by financing activities 17,650 10,414 Net increase in cash 1,643 129 Cash, beginning of period 176 47 Cash, end of period $ 1,819 $ 176 The accompanying notes are an integral part of these consolidated financial statements. 79 SeaStar Medical Holding Corporation Consolidated Statements of Cash Flows, cont’d For the Years Ended December 31, 2024 and 2023 (in thousands, except for shares and per-share amounts) Supplemental disclosure of cash flow information 2024 2023 Cash paid for income taxes $ 3 $ — Cash paid for interest $ 553 $ 1,126 Supplemental disclosure of noncash financing activities Exercise of liability classified warrants $ 3,106 $ — Shares issued as payment of convertible notes $ 10,210 $ 10,411 Shares issued to settle forward option-prepaid forward contracts $ — $ 1,870 Board compensation settled in shares of common stock in-lieu-of-cash a 210 $ — Offering costs incurred but not paid $ 45 $ — Issuance of convertible note warrants $ 586 $ 2,705 The accompanying notes are an integral part of these consolidated financial statements. 80 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Note 1. D e scription of Business Organization and description of busines s SeaStar Medical Holding Corporation, a Delaware corporation, and its wholly owned subsidiary, SeaStar Medical, Inc. (the “Predecessor”), are collectively referred to as the “Company”. The Predecessor was incorporated as a Delaware corporation in June 2007, and it is headquartered in Denver, Colorado. The Company is a commercial stage business and also focused on product development. The Company is principally engaged in the research, development, and commercialization of a platform medical device technology designed to modulate inflammation in various patient populations. The initial target of this technology is for the treatment of acute kidney injuries in pediatric patients. On October 28, 2022, LMF Merger Sub, Inc., a wholly owned subsidiary of LMF Acquisition Opportunities, Inc., (“LMF”), merged with and into the Predecessor (the “Business Combination”), with the Predecessor surviving the Business Combination as a wholly owned subsidiary of LMF. Following the consummation of the Business Combination, LMF was renamed to “SeaStar Medical Holding Corporation”. Basis of Presentation The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). On June 7, 2024, the Company effected a 1-for-25 reverse-stock split (the “Reverse Stock-Split”) of its issued and outstanding shares of common stock , par value $ 0.0001 (the “common stock”). Following the effect of the Reverse Stock Split, each 25 shares of the Company’s common stock that were issued and outstanding automatically converted into one outstanding share of common stock. All stock options and warrants of the Company outstanding immediately prior to the Reverse Stock-Split were proportionally adjusted except for the Listed Warrants and the private placement warrants that were issued as part of the SPAC transaction that closed on October 28, 2022, which total 16,788,000 outstanding warrants in the aggregate (the “Unadjusted Warrants”). The Unadjusted Warrants each retained an $ 11.50 exercise price and require the exercise of 25 warrants to purchase one share of common stock. Unless otherwise indicated, all other share and per share amounts in this annual report reflect the effect of the Reverse-Stock Split. The par value of the Company’s common stock remained unchanged at $ 0.0001 per share and the number of authorized shares of common stock remained the same after the Reverse-Stock Split. Liquidity and going concern As of December 31, 2024, the Company has an accumulated deficit of approximately $ 139.6 million and cash of approximately $ 1.8 million. The Company does not believe that its cash on hand will be sufficient to enable it to fund its operations, including clinical trial expenses and capital expenditure requirements for at least 12 months from the issuance of these consolidated financial statements. The Company believes that these conditions raise substantial doubt about its ability to continue as a going concern. The Company’s need for additional capital will depend in part on the scope and costs of its development activities. To date, the Company has generated very little revenue from the sales of it's commercialized product, QUELIMMUNE. Its ability to generate meaningful product revenue will depend on the successful launch of QUELIMMUNE and development and eventual commercialization of the adult SCD. Until such time, if ever, it expects to finance its operations through the sale of equity or debt, borrowing under credit facilities, or through potential collaborations, other strategic transactions or government and other grants. Adequate capital may not be available to the Company when needed or on acceptable terms. If the Company is unable to raise capital, it could be forced to delay, reduce, suspend, or cease its research and development programs or any future commercialization efforts, which would have a negative impact on its business, prospects, operating results and financial condition. The accompanying consolidated financial statements have been 81 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. Risks and uncertainties The Company is subject to risks common to early-stage companies in the medical technology industry including, but not limited to, new medical and technological innovations, dependence on key personnel, protection of proprietary technology, and product liability. There can be no assurance that the Company’s products or services will be accepted in the marketplace, nor can there be any assurance that any future products or services can be developed or deployed at an acceptable cost and with appropriate performance characteristics, or that such products or services will be successfully marketed, if at all. These factors could have a materially adverse effect on the Company’s future financial results, financial position and cash flows. Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the period. Significant estimates include the (i) valuation of the liability classified warrants, (ii) prepaid forward purchase agreement derivative liability, (iii) provision for income taxes, (iv) convertible debt measured at fair value, (v) unbilled clinical trial costs, (vi) and stock-based compensation expense. Although actual results could differ from those estimates, such estimates are developed based on the best information available to management and management’s best judgments at the time. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The company did not have any cash equivalents as of December 31, 2024 and 2023. Concentrations of credit risk Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Accounts Receivable The need for a credit loss allowance is evaluated each reporting period based on the Company’s assessment of the credit worthiness of its customers or any other potential circumstances that could result in a credit loss. The Company initially estimates credit losses based on a portfolio-wide method using an aging schedule at the end of each reporting period. Any customer specific collections subsequent to the reporting period are then adjusted accordingly. All outstanding accounts receivable customer balances at December 31, 2024 were fully paid subsequent to December 31, 2024. Accordingly, there is no reserve for a credit loss allowance provided as of December 31, 2024. Income taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement carrying amounts and the tax bases 82 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 of assets and liabilities using enacted tax rates expected to apply to taxable income in the periods in which such differences are expected to reverse. A valuation allowance is provided when the realization of net deferred tax assets is not deemed more likely than not. The Company complies with the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes , which provides a comprehensive model for the recognition, measurement, and disclosure in consolidated financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under this guidance, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50 %) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position; otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50 % likelihood of being realized upon ultimate settlement. Additionally, the Company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the consolidated financial statements. Use of Derivative Instruments The Company’s derivative instruments historically have consisted of financial instruments that arose as part of the Company’s ongoing efforts to raise capital to fund the Company’s operations. It is likely that ongoing efforts to raise capital in the future will result in additional derivative instruments to be issued as part of those efforts. The Company has not nor does it intend to utilize derivative instruments for risk management (i.e. hedging) or investing activities. These derivative instruments have taken the form of warrants, convertible debt, and other financing arrangements such as a prepaid forward purchase option. The classification of these financial instruments as either a component of liabilities or equity is specific to the terms within each financial instrument agreement. and the application of U.S. GAAP. For those that are liability classified, the Company recognized changes in the fair value of each financial instruments as a “non-operating income / (expense)” component of the Statement of Operations and an adjustment to operating cash flows within the Statement of Cash Flows each reporting period. The issuance of each derivative instrument is reported as a proceed in the financing section to the Statement of Cash Flows, while the ultimate settlement of each derivative instrument could be reported either as an adjustment to operating cash flows, paydown within financing cash flows, or a non-cash transaction depending on the settlement. Fair value option of accounting Generally, when financial instruments are first acquired that are not required to be recorded at fair value per U.S. GAAP, ASC 825, Financial Instruments allows an entity to elect the fair value option (“FVO”). The FVO may be elected on an instrument-by-instrument basis only at the time of acquisition and once elected is irrevocable. The FVO allows an entity to account for the entire financial instrument at fair value with subsequent changes in fair value recognized in earnings through the consolidated statements of operations at each reporting date. A financial instrument is generally eligible for the FVO if, amongst other factors, no part of the financial instrument is classified in stockholders’ equity. Based on the eligibility assessment discussed above, the Company concluded that its convertible notes (see Note 8) were eligible for the FVO and accordingly elected the FVO for those debt instruments. This election was made because of operational efficiencies in valuing and reporting for these debt instruments at fair value in their entirety at each reporting date. The convertible notes contained certain embedded derivatives that otherwise would require bifurcation and separate accounting at fair value. The convertible notes, inclusive of their respective accrued interest at the stated interest rates (collectively referred to as the “FVO debt instruments”) were initially recorded at fair value as liabilities on the consolidated balance sheets and subsequently re-measured at fair value at the end of each reporting period presented within the consolidated financial statements until they were settled in 2024. The changes in fair value of the FVO debt instruments are recorded 83 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 in changes in fair value of convertible notes, included as a component of other income (expense), net, in the consolidated statements of operations. Fair value of financial instruments The following provides a summary of those assets or liabilities for which the Company is required to measure at fair value either on a recurring basis, the valuation techniques and summary of inputs used to arrive at the measure of fair value. Changes in fair value of these assets or liabilities are recognized as a component of net income in the consolidated statements of operations. Changes in fair value of these assets or liabilities are considered unrealized gains or losses and therefore are classified as non-cash adjustments to reconcile net income to operating cash flows. Significant increases (decreases) in unobservable inputs used in fair value measurements could, in isolation, potentially result in a significantly lower or higher valuation for those assets or liabilities requiring recurring fair value measurements at each reporting date. For each simulated path, the forward purchase value was calculated based on the contractual terms and then discounted at the term-matched risk-free rate. Finally, the value of the forward was calculated as the average present value over all simulated paths. Investor D Convertible Notes. The convertible notes were recorded as liabilities and were recorded at fair value based on Level 3 measurements until they were fully settled in 2024. The estimated fair values of the convertible notes were each determined based on the aggregated, probability-weighted average of the outcomes of certain possible scenarios. The combined value of the probability-weighted average of those outcomes was then discounted back to each reporting period in which the convertible notes were outstanding, in each case, based on a risk-adjusted discount rate estimated based on the implied interest rate using the changes in observed interest rates of corporate rate debt that the Company believes was appropriate for those probability-adjusted cash flows. The change in fair value of the Investor D Convertible Notes each reporting period was recorded to the change in fair value of convertible notes in the consolidated statement of operations. Liability Classified Warrants. The Company has entered into or assumed various financial instruments, in the form of warrant agreements, that require classification as liabilities. This classification requires that the Company measure the warrants at each fair value reporting period. The Company uses a Black-Scholes option pricing model to fair value the warrants, using standard option pricing inputs such as the strike price of each warrant tranche, estimated volatility, time to maturity, and the risk-free interest rate. The risk-free interest rate is the U.S. Treasury rate at the date of issuance, and the time to maturity is based on the contractual life at the date of issuance, which is five years . The change in fair value of the liability classified warrants each reporting period is recorded to the change in fair value of warrants liability in the consolidated statements of operations. Operating Current Assets and Current Liabilities. The estimated fair value of cash, accounts receivables, prepaid expenses, accounts payable and accrued expenses approximate their fair value because of the short-term nature of these instruments. Classification of Derivative Gains and Losses on the Statement of Cash Flows. Changes in fair value related to the Company’s derivative financial instruments consisting of (i) liability classified warrants, (ii) convertible notes, and (iii) forward purchase agreements are classified in operating cash flows as adjustments to net income. Revenue Recognition Overall Under ASC Topic 606, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of Topic 606, the Company evaluates the following criteria: (i) identify the contract with a customer; (ii) identify 84 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation. Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct combined performance obligation is identified. The Company then allocates the transaction price to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied. The estimate of the transaction price for each contract includes all variable consideration to which the Company expects to be entitled, subject to the constraint on variable consideration. The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. Variable consideration is not constrained if the potential reversal of cumulative revenue recognized at the contract level is not significant. The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as contract obligations. Amounts expected to be recognized as revenue within the one year following the balance sheet date are classified as current contract obligations. Amounts not expected to be recognized as revenue within the one year following the balance sheet date are classified as contract obligations, net of current portion. See Note 3 – Revenues and Contract Obligations for further details. Product Sales Revenue The Company has sold and intends to continue to sell its products either through a combination of distributor(s) and/or directly to end-user qualified customers through the Company’s own internal commercial/sales resources. The acting distributor during the year ended December 31, 2024 subsequently resold and was to continue to resell the products to present and future customers, until such time the Company terminated its agreement with the distributor (see Notes 3 and 13). • Timing of Revenue Recognition – During the brief history (commenced July 2024) of selling pediatric SCDs, revenue has been recognized based on a freight-on-board destination ( “ FOB Destination”) requirement. • Chargebacks, Government Rebates and Discounts – During the brief history of selling pediatric SCDs commercially, the Company has not agreed to chargebacks, government rebates or discounts. • Returns – Returns are specific to each order, but generally the Company allows for returns of any damaged or non-conforming product within 30 days of receipt of product. Given the (i) overall rate of product shipped that is defective/damaged, (ii) overall volume of sales to individual end-user customers, (iii) expected supply in the customer channel, and (iv) expected usage by customers, the Company does not anticipate that there will be significant risk of product returns overall. • Variable Consideration – based on the above and given the materiality of current sales (less than $ 0.1 million sold through the year ended December 31, 2024), the Company does not currently estimate a constraint on revenue recognized on product sales. • Transaction Price – based on the above, as currently constructed, the Company’s transaction price is fixed, based on the agreed-upon price per each purchase order submitted by each customer. Milestone or up-front payments unique to the distributor were disclosed in Note 3 (also see Note 13), and are not expected to be recognized as revenue, but were returned as a result of a settlement to cease the relationship with the distributor. • Allocation of Consideration – each sale of a pediatric SCD is independent of any and all other sales. The entire transaction price for each pediatric SCD is allocated to the sale of that pediatric SCD. 85 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 The Company will continue to monitor all of the above as the Company continues to commercialize and increase its customer base, which could result with each distributor or end-user customer agreement resulting in its own unique terms and conditions, that will potentially impact the timing and amount of revenue recognition pursuant to U.S. GAAP. Cost of Goods Sold Prior to July 2024, the Company only manufactured/assembled pediatric or adult SCDs for research oriented and/or clinical trial related activities. Accordingly, as of and during the year ended December 31, 2024, all inventory on-hand or utilized had $ 0 carrying value, as it was expensed to research and development expense at the time of purchase. Accordingly, for pediatric SCDs sold during the year ended December 31, 2024, the Company recognized no cost of goods sold, as there was no carrying value attributed to those units sold. As the Company procures inventory in the future, the Company will place value on raw materials and component parts, as there is the potential that the raw materials could be used either for (i) commercial purposes ( QUELIMMUNE sales ) or (ii) research and development purposes ( adult SCDs used in ongoing clinical trials ). Stock-based compensation In accordance with ASC Topic 718, Compensation – Stock Compensation , the Company recognizes compensation expense for all stock-based awards issued to employees based on the estimated grant-date fair value, which is recognized as expense on a graded vesting approach over the requisite service period. The Company has elected to recognize forfeitures as they occur. The fair value of stock options is determined using the Black-Scholes option-pricing model. The determination of fair value for stock options on the date of grant using an option-pricing model requires management to make certain assumptions including implied volatility, expected term, risk-free interest rate and expected dividends ($nil) in addition to the Company’s common stock valuation. The determination of fair value of restricted stock units is valued based on the value of the Company’s common stock on the grant date. Research and development expenses Expenditures made for research and development are charged to expense as incurred. External costs consist primarily of payments for laboratory supplies purchased in connection with the Company’s discovery and preclinical activities, and process development and clinical development activities. Internal costs consist primarily of employee-related costs, consultants fees and costs related to compliance with regulatory requirements. The Company records expenses related to external research and development services based on services received and efforts expended pursuant to invoices and contracts with consultants that supply, conduct, and manage preclinical studies and clinical trials on its behalf. Emerging growth company status The Company is an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. The Company has elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (1) no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. Net loss per share attributable to common stockholders The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method. See Note 16 for disclosures 86 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 on exclusion of certain instruments which would be anti-dilutive in circumstances where the Company is reporting a net loss for that earnings period. Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities as certain outstanding warrants are considered participating securities. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. As the Company has reported a net loss for the period presented, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for this period. Recently adopted accounting standards Accounting Standards Update 2023-07 - In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. See Note 17 - Segment Reporting. The Company adopted this as of December 31, 2024 , resulting in a dedicated segment reporting footnote with the requisite disclosures (see Note 17 - Segment Reporting ). Recently issued accounting standards not yet adopted Accounting Standards Update 2024-03 — In November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income – Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses . ASU 2024-03 requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures. Accounting Standards Update 2023-09 — In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures . ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its consolidated financial statements and disclosures. 87 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Note 3. Revenues and Contract Obligations In December 2022, the Company entered into a License and Distribution Agreement (the “Distribution Agreement”) with Nuwellis, Inc. (“Nuwellis”) granting exclusive distribution rights of the Company’s pediatric SCD within the United States of America. Under the terms of the Distribution Agreement, Nuwellis would pay the Company consideration comprising both (i) a per unit sales price for each unit shipped and (ii) a royalty for all units sold to customers. In addition, Nuwellis also agreed to pay (i) a $ 100 thousand upfront payment at contract inception (the “Up-front Payment”), and (ii) two contingent milestones payments consisting of (a) $ 450 thousand payment upon meeting the regulatory milestone of receiving HDE approval from the FDA (the “Regulatory Milestone Payment”), and (b) $ 300 thousand payment upon meeting a sales-based milestone (the “Sales Based Milestone Payment”). The Company had the following performance obligations within the Distribution Agreement: (i) a material right to Nuwellis consisting of an exclusive option for Nuwellis to purchase additional pediatric SCDs during the term of the Distribution Agreement for a discounted price, (ii) to provide training to Nuwellis personnel and medical professionals at end-user customers of Nuwellis and (iii) upon each receipt of a valid Nuwellis purchase order, delivery of pediatric SCDs. The transaction price for the Nuwellis material right and training is comprised of the Upfront Payment, the Regulatory Milestone Payment and the Sales Based Milestone Payment. The transaction price for each pediatric SCD device sold was the actual price for each device and the estimated royalties to be received. Prior to the Company’s termination of the Distribution Agreement discussed below, the Company received full consideration for the Up-front Payment and the Regulatory Milestone Payment for a total of $ 550 thousand, which had been recorded as contract liabilities and was to be recognized over the remaining term of the Distribution Agreement. However, the Company and Nuwellis entered into a confidential settlement agreement on October 20, 2024 (the “Settlement Agreement”), in connection with the Company’s termination of the Distribution Agreement on August 18, 2024. Under the Settlement Agreement the Company agreed to refund Nuwellis the entire $ 550 thousand comprising of the Upfront Payment and Regulatory Milestone plus an additional $ 350 thousand for a total of $ 900 thousand, of which the $ 350 thousand was charged to general and administrative expense. The amounts were paid to Nuwellis in three installments during the quarter ended December 31, 2024. As a result, the Company (i) was precluded from recognizing revenue of approximately $ 0.1 million for product shipments to Nuwellis during the year ended December 31, 2024, (ii) was precluded from recognizing any revenues related to contract liabilities arising the Upfront Payment and Regulatory Milestone through December 31, 2024, (see below), and (iii) does not anticipate there will be any future shipments of pediatric SCDs to Nuwellis going forward. Due to the termination of the Distribution Agreement and related Settlement Agreement, the Company did not recognize any revenue from the Up-Front Payment or the Regulatory Milestone Payment as it refunded the payments to Nuwellis as part of the Settlement Agreement. Since the termination of the Distribution Agreement, the Company developed its own commercial operations and sold approximately $ 0.1 million of pediatric SCDs to an end-user customer during the year ended December 31, 2024. The following table summarizes the changes in the Company’s contract liability balance for the years ended December 31, 2024 and 2023: Year Ended ($ in thousands) 2024 2023 Contract liabilities, beginning of period $ 100 $ — Consideration received 450 100 Consideration refunded ( 550 ) — Revenue — — Contract liabilities, end of period $ — $ 100 88 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 The Company had no contract assets at the beginning or end of the fiscal years ended December 31, 2024 and 2023. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. Note 4. Trade Accounts Receivable The table below presents the opening and closing balances of accounts receivable, on a gross and net basis, with the total change in expected credit losses. ($ in thousands) Accounts Receivable, Gross Expected Credit Losses Accounts Receivable, Net December 31, 2023 $ — $ — $ — Increase in trade account receivable, gross 112 — — December 31, 2024 $ 112 $ — $ — Note 5. Accrued Expenses Accrued expenses consisted of the following amounts as of December 31, 2024 and 2023: ($ in thousands) December 31, 2024 December 31, 2023 Accrued bonus $ 1,391 $ 501 Accrued director compensation 391 427 Accrued research and development 1,023 507 Other 383 88 Total accrued expenses $ 3,188 $ 1,523 Note 6. Forward Purchase Agreements In October 2022, LMF, entered into Forward Purchase Agreements (“FPAs”) with (i) Vellar Opportunity Fund SPV LLC – Series 4 and (ii) HB Strategies LLC (collectively the “FPA Sellers”), whereby, prior to the Business Combination, the FPA Sellers purchased 1,151,400 LMF Class A Shares from redeeming holders (the “Recycled Shares”), and an additional 200,000 LMF Class A Shares constituting share consideration, each at an average price per share of $ 10.37 . Pursuant to the FPAs, the FPA Sellers waived their redemption rights under the governing documents of LMF Merger Sub, Inc. in connection with the Business Combination. At the Closing, LMF paid to Vellar, out of funds held in the LMF trust account, aggregate amounts of approximately $ 14.4 million, an amount equal to 1,173,400 LMF Class A Shares (“Recycled Shares”), multiplied by $ 10.37 , the redemption price, approximately $ 2.1 million for the purpose of repayment of the FPA Sellers having purchased 200,000 shares from third parties in the open market, and reimbursement of legal expenses and a commission fee in the amount of approximately $ 0.2 million. The FPA Sellers could, at their discretion, sell Recycled Shares (“Terminated Shares”). The Company was entitled to proceeds from such sales of Terminated Shares equal to the number of Terminated Shares multiplied by the reset price (the “Reset Price”). The Reset Price was initially the per-share redemption price, but was adjusted on a monthly basis to the lower of (a) the then-current Reset Price, (b) $ 10.00 and (c) the volume weighted-average price (“VWAP”) of the last ten trading days of the prior calendar month, but not lower than $ 5.00 ; provided, however, that if the Company offered and sold Class A common stock, or then outstanding or future issued securities were exercised or converted, at a price lower than then then-current Reset Price, then the Reset Price would be modified to equal such reduced price. In the event that the VWAP Price was less than $ 3.00 per share for 20 trading days during any 30 trading-day-period, then the FPA Sellers could accelerate the maturity date (“Maturity Date”), which otherwise would have been the third anniversary of the Closing. Upon the occurrence of the Maturity Date, the Company was obligated to pay to the FPA Sellers an amount equal to the number of unsold Recycled Shares, multiplied by $ 2.50 (the “Maturity Consideration”). 89 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 The Maturity Consideration was payable by the Company in cash, or at the Company’s option, as equity, issued in Class A common stock, with a per share issue price based on the average daily VWAP Price over 30 scheduled trading days. FPA Sellers would then deliver to the Company the number of unsold Recycled Shares. During the year ended December 31, 2022, 3,995 Recycled Shares were sold by FPA Sellers. There were 1,147,405 Recycled Shares remaining at December 31, 2022. During the year ended December 31, 2023, an additional 374,005 Recycled Shares were sold by FPA Sellers. The Company received approximately $ 1.9 million for the shares sold and recognized a gain of approximately $ 1.3 million on the sale. Losses on remeasurement of approximately $ 1.7 million were recorded in change in fair value of forward option-prepaid forward contracts on the consolidated statements of operations for the year ended December 31, 2023. In accordance with ASC 815, Derivatives and Hedging , the Company had determined that the forward option within the Forward Purchase Agreement, coupled with certain settlement features were embedded features that required bifurcation and recognition as a liability. The liability was remeasured at each reporting date until the liability was extinguished in 2023. The Company recognized a loss of $ 2.3 million during the year ended December 31, 2023, from the remeasurement of the liability. In March 2023, the price of the Company stock was below $ 3.00 for more than 20 trading days and the FPA Sellers at their discretion had the ability to specify the maturity dates for the FPAs. During the year ended December 31, 2023, the FPA Sellers specified the maturity dates and the FPAs matured and were settled by transferring (i) 1,096,972 shares and (ii) all remaining 773,400 unsold Recycled Shares to the FPA Sellers. Upon the final settlement of the FPA, the Company recognized a gain of approximately $ 1.0 million as the ultimate amount to settle the repurchase of the Company’s shares of common stock underlying the FPAs was reduced by the counterparties to the agreements. Approximately $ 11.5 million was reclassed to equity as a result of the settlement of the forward purchase agreements during the year ended December 31, 2023. Note 7. Notes Payable Notes payable consisted of the following: ($ in thousands) December 31, 2024 December 31, 2023 LMFA notes payable $ — $ 296 LMFAO note payable — 1,128 Maxim note payable — 2,771 Insurance financing 574 565 Unamortized deferred financing costs — ( 52 ) Total 574 4,708 Less current portion ( 574 ) ( 565 ) $ — $ 4,143 On March 15, 2023, the Company amended its LMFA notes payable, LMFAO note payable, and Maxim note payable, extending their maturity dates to June 15, 2024 . Additionally, the noteholders agreed to waive their right to receive mandatory prepayments for proceeds received from the first closing of the convertible note financings discussed in Note 8, but designated a mandatory prepayment amount to be paid upon the second closing of the convertible note financings. On May 12, 2023, another amendment was executed whereby the mandatory prepayment amount related to the second closing of the convertible note financings was waived. In consideration for such extensions, the Company agreed to pay the noteholders an aggregate amount of $ 0.1 million in cash upon receipt of proceeds from the issuance of the note at the second closing under the Securities Purchase Agreement (“SPA”) (see Note 10). The $ 0.1 million consideration for the modification was capitalized as a deferred financing cost. The Company amortized $ 52 thousand and $ 48 thousand of the deferred financing cost during the years ended December 31, 2024 and 2023, respectively. On August 7 and December 11, 2023, the Company entered into certain amendments and waivers for the LMFA notes payable, LMFAO note payable, and Maxim note payable. The lenders waved their rights to receive any mandatory prepayments for proceeds received by the Company from the convertible note financings and agreed to extend the maturity 90 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 dates to 91 days after the last maturity date applicable to any of the notes issued pursuant to the amended SPA. In relation to the amendment to the Maxim note payable on December 11, 2023, the Company agreed to make a loan payment of $ 0.1 million and $ 0.1 million for placement and other past due fees. As of December 31, 2024, the Company had fully extinguished all notes payable to LMFA, LMFAO and Maxim for $ 5.4 million of cash. Senior Secured LMFA Notes Payable On September 9, 2022, the Predecessor entered into a Credit Agreement (“LMFA Note”) with LM Funding America, Inc. (“LMFA”) whereby LMFA agreed to make advances to the Predecessor of up to $ 0.7 million for general corporate purposes at an interest rate of 15 % per annum. All advances made to the Predecessor under the LMFA Note and accrued interest were due and payable to LMFA on the maturity date. The maturity date of the loan was originally the earlier of (a) October 25, 2022, (b) the consummation of the Business Combination, and (c) the termination of the Merger agreement. On October 28, 2022, SeaStar Medical Holding Corporation and LMFA entered into the First Amendment to Credit Agreement, dated September 9, 2022, between LMFA and the Predecessor whereby (i) the maturity date of the loan under the LMFA Note was extended to October 30, 2023 ; (ii) the Company was required to use 5.0 % of the gross cash proceeds received from any future debt and equity financing to pay outstanding balance of LMFA Note, provided that such repayment is not required for the first $ 0.5 million of cash proceeds; (iii) the interest rate of the LMFA Note is reduced from 15 % to 7 % per annum; and (iv) the default interest rate is reduced from 18 % to 15 %. The LMFA Note contained customary representations and warranties, affirmative and negative covenants, and events of default. In addition, on October 28, 2022, the parties entered into a security agreement, pursuant to which SeaStar Medical Holding Corporation granted LMFA a security interest in substantially all of the assets and property of the Company, subject to certain exceptions, as collateral under the amended LMFA Note. In addition, the Company entered into a guaranty, dated October 28, 2022, whereby SeaStar Medical Holding Corporation unconditionally guarantees and promises to pay to LMFA the outstanding principal amount under the LMFA Note. On November 2, 2022, the Company entered into an additional promissory note in the amount of approximately $ 0.3 million with LMFA. The promissory note was noninterest bearing and was originally due on demand at any time on or after March 31, 2023. The Company paid the LMFA notes in full during the year ended December 31, 2024. Senior Secured LMFAO Note Payable On October 28, 2022, the Company entered into a consolidated amended and restated promissory note with LMFAO Sponsor, LLC, LMAO’s sponsor and the sole holder of founding shares (the “Sponsor”) as the lender, for an aggregate principal amount of $ 2.8 million (the “LMFAO Note”) to amend and restate in its entirety (i) the promissory note, dated July 29, 2022, for $ 1.0 million in aggregate principal amount issued by LMAO to the Sponsor and (ii) the Amended and Restated Promissory Note, dated July 28, 2022, for $ 1.8 million in aggregate principal amount, issued by LMAO to the Sponsor (collectively, the “Original Notes”). The LMFAO Note amended the Original Notes to (i) extend maturity dates of the Original Notes to October 30, 2023 ; (ii) permit outstanding amount due under the LMFAO Note to be prepaid without premium or penalty; and (iii) require the Company to use 20.0 % of the gross cash proceeds received from any future debt and equity financing to pay outstanding balance of LMFAO Note, provided that such repayment is not required for the first $ 500 of cash proceeds. The LMFAO Note carried an interest rate of 7 % per annum and contained customary representations and warranties and affirmative and negative covenants. The LMFAO Note was subject to events of default, which could have resulted in the LMFAO Note becoming immediately due and payable, with interest of 15.0 % per annum. In addition, on October 28, 2022, the parties entered into a security agreement whereby the Company granted the Sponsor a security interest in substantially all of the assets and property of the Company, subject to certain exceptions, as collateral to secure the Company’s obligations under the LMFAO Note. The Company paid this note in full during the year ended December 31, 2024. Unsecured Maxim Note Payable Pursuant to an engagement letter between the Company and Maxim dated October 28, 2022, the Company was required to pay Maxim, as its financial advisor, an amount equal to $ 4.2 million in cash as professional fees ($ 2.0 million assumed from LMAO and $ 2.2 million related to professional fees of the Company). Upon the Closing, the parties agreed that such amount would be paid in the form of a promissory note. Accordingly, on October 28, 2022, the Company entered into a promissory note with Maxim as the lender, for an aggregate principal amount of $ 4.2 million (the “Maxim Note”). The 91 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Maxim Note had a maturity date of October 30, 2023 and outstanding amounts may be prepaid without premium or penalty. If the Company received any cash proceeds from a debt or equity financing transaction prior to the maturity date, then the Company was required to prepay the indebtedness equal to 25.0 % of the gross amount of the cash proceeds, provided that such repayment obligation shall not apply to the first $ 0.5 million of the cash proceeds received by the Company. Interest on the Maxim Note was due at 7.0 % per annum. The Maxim Note contained customary representations and warranties, and affirmative and negative covenants. The Maxim Note was subject to events of default, which could have resulted in the Maxim Note becoming immediately due and payable, with interest of 15.0 % per annum. As a result of the Reverse Stock-Split, the Maxim Note balance became due within 90 days of the June 2024 Reverse Stock-Split event. The Maxim Note was paid in full during the year ended December 31, 2024. Insurance Financing In October 2024, the Company entered into a financing arrangement with a lender to finance a portion of the annual premium of an insurance policy in the amount of $ 0.7 million. Interest on the financing agreement was 8.440 % per annum. The October 2024 financing agreement is to be paid in 10 monthly installments, with an outstanding balance of approximately $ 0.6 million at December 31, 2024. In October 2023, the Company entered into a financing arrangement with a lender to finance a portion of the annual premium of an insurance policy in the amount of $ 0.7 million. Interest on the financing agreement was 9.55 % per annum. The October 2023 financing agreement had an outstanding balance of approximately $ 0.6 million as of December 31, 2023, and was paid in full during the year ended December 31, 2024. Related Party Notes The Company from time to time has entered into short-term financings with LMFA to provide short-term liquidity needs. A total of three notes were entered into during the year ended December 31, 2023, ranging from $ 25 thousand to $ 0.1 million, with a total borrowing of $ 225 thousand during the fiscal year. All notes had annualized interest of 7.00 % and were paid off within 30 days of each borrowing. There were no related party notes outstanding at December 31, 2024 and 2023. Investor D Note On June 28, 2024, the Company and Investor D agreed to exchange all of the remaining outstanding warrants held by Investor D, which were issued in connection with Investor D's convertible debt issued between March 2023 and January 2024, into a short-term note of approximately $ 0.5 million. The interest rate on the loan was 7.0 % per annum and the note was paid in full during the year ending December 31, 2024. 92 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Note 8. Convertible Notes Convertible notes payable activity for the year ended December 31, 2024, consisted of the following: ($ in thousands) 3rd Investor D Note 3-1 3rd Investor D Note 3-2 3rd Investor D Note 3-3 3rd Investor D Note 3-4 4th Investor D Note 5th Investor D Note 6th Investor D Note Total Balance as of December 31, 2023 $ 1,012 $ 999 $ 972 $ 568 $ 822 $ — $ — $ 4,373 Issuance (Face Value) — — — — — 272 815 1,087 Fair value of detachable warrants at issuance — — — — — ( 147 ) ( 439 ) ( 586 ) (Gain)/loss on conversion 1,201 636 615 381 77 482 2,005 5,397 Conversion to common stock ( 2,213 ) ( 1,635 ) ( 1,587 ) ( 949 ) ( 947 ) ( 607 ) ( 2,381 ) ( 10,319 ) (Gain)/loss on reporting period remeasurement — — — — 748 — — 748 Redemption — — — — ( 700 ) — — ( 700 ) Balance as of December 31, 2024 $ — $ — $ — $ — $ — $ — $ — $ — Investor D Unsecured Convertible Notes On March 15, 2023, the Company entered into a Securities Purchase Agreement (the “Investor D SPA”) with an institutional investor (“Investor D”), whereby the Company agreed to issue a series of four senior unsecured convertible notes (collectively, the “Investor D Convertible Notes”) during the year ended December 31, 2023 with principal proceeds totaling up to $ 9.8 million and warrants to purchase shares of the Company’s common stock. On March 15, 2023, t he Company issued the first senior unsecured convertible note (the “First Investor D Note”) in the amount of approximately $ 3.3 million, convertible into 48,309 shares of common stock at an initial conversion price of $ 67.50 . The First Investor D Note was issued at an 8.0 % discount, bore interest at 7.0 % per annum, matured on June 15, 2024 , and required monthly installments of principal and interest. In addition, the Company issued warrants to purchase 13,134 shares of common stock (the “First Investor D Warrants”). The First Investor D Warrants have an initial exercise price of $ 74.25 per share of common stock, expire in five years from their issuance date, and contain a cashless exercise provision. On May 12, 2023, the Company issued a second senior unsecured convertible note (the “Second Investor D Note”) in the amount of approximately $ 2.2 million, convertible into 32,206 shares of common stock at an initial conversion price of $ 67.50 . The Second Investor D Note was issued at an 8.0 % discount, bore interest at 7.0 % per annum, matured on August 12, 2024 , and required monthly installments of principal and interest. In addition, the Company issued warrants to purchase 8,756 shares of common stock (the “Second Investor D Warrants”). The Second Investor D Warrants have an initial exercise price of $ 74.25 per share of common stock, expire five years from their issuance date, and contain a cashless exercise provision. First Amendment to the Investor D SPA On August 7, 2023, the Company entered into an amendment to the Investor D SPA, whereby the provisions of the third closing are amended (the “First Amended Investor D SPA”). Investor D shall have the discretion to purchase additional shares of the Company’s stock in an aggregate principal amount of $ 2.0 million (the “Third Investor D Note”). The Third Investor D Note consisted of four tranches which closed on August 7, 2023 , August 30, 2023 , September 26, 2023 , and November 27, 2023 . Each tranche of the Third Investor D Note was issued at an 8.0 % discount, bore interest at 7.0 % per annum and required monthly installments of principal and interest. Each tranche of the Third Investor D Note was conver tible into 108,686 shares of common stock at an initial conversion price of $ 5.00 , in a p rincipal amount of $ 0.5 million, and includes a warrant to purchase up to 29,552 shares of common stock with an exercise price of $ 5.00 per share. The Third Investor D Notes had maturity dates of November 6, 2024 , November 29, 2024 , December 25, 2024 , and February 26, 2025 . Also on August 7, 2023, the Company entered into a side letter with Investor D (the “Letter Agreement”), pursuant to which the Company agreed to adjust the conversion price of the First and Second Inv estor D Notes to the lowest of (i) $ 5.00 , 93 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 (ii) the closing sale price of common stock on the trading day immediately preceding the date of the conversion, and (iii) the average closing sale price of common stock for the five consecutive trading days immediately preceding the date of the conversion (the “Amended First Investor D Note” and the “Amended Second Investor D Note”). The Company also agreed to issue a convertible note warrant to purchase up to 190,625 shares of common stock with an exercise price of $ 5.00 per share of common stock . The Company concluded that the August 7, 2023, amendment should be accounted for as an extinguishment of the First and Second Investor D Notes. The Company derecognized the First and Second Investor D Notes with principal amounts of approximately $ 1.9 million and $ 0.6 million, respectively, and recorded fair value amounts of approximately $ 1.6 million and $ 1.3 million, respectively. The Company then recognized the Amended First and Second Investor D Notes at fair value based on the amended terms at approximately $ 3.5 million and $ 2.7 million, respectively, and recorded a loss on extinguishment for the difference between the fair value with the amended terms and the fair value of the original terms on August 7, 2023, of approximately $ 3.3 million. The Company recorded the convertible note warrants issued with the Letter Agreement as a liability measured at fair value at inception with subsequent changes in fair value recorded in earnings. The initial fair value of the convertible note warrants issued with the Letter Agreement of approximately $ 1.6 million was also recorded as loss on extinguishment. The Second Amendment to the Investor D SPA On December 11, 2023, the Company entered into the Second Amendment to the Investor D SPA which increased the maximum amount of additional funding from approximately $ 2.0 million to app roximately $ 4.0 million. In addition, the Company closed on a fourth convertible note (the “Fourth Investor D Note”) in a principal amount of approximately $ 1.1 million, which is convertible into shares of common stock at a conversion price of $ 14.00 per share, beginning on the earlier of June 11, 2024 (or earlier upon mutual written agreement of the Company and the purchaser), or the date of an event of default, as defined in the Fourth Investor D Note, with a maturity date of March 11, 2025 . The Company also issued two warrants each to purchase up to 21,108 shares of common stock with an exercise price of $ 14.00 per share. Payments for Principal and Interest and Conversions of Investor D Notes During FY 2023 During the year ended December 31, 2023, the Company made cash payments of principal and interest of approximately $ 0.2 million and $ 21 thousand, respectively, on the combination of the First Investor D and Amended First Investor D Notes. The Company also made additional principal and interest payments, which included accelerated payments through equity conversions. Investor D elected to convert the conversion amount (as defined in the Amended First Investor D Note) into shares of common stock of the Company. The Company converted principal and interest into 496,831 s hares of common stock with a fair value of approximately $ 7.0 million. The Amended First Investor D Note was fully satisfied as of December 31, 2023. During the year ended December 31, 2023, the Company made cash payments of principal and interest of $ 21 thousand and $ 3 thousand, respectively, on the Second Investor D Note. The Company also made additional principal and interest payments, which included accelerated payments through equity conversions. Investor D elected to convert the conversion amount as defined in the Amended Second Investor D Note into shares of common stock of the Company. The Company converted principal and interest i nto 417,078 s hares of common stock with a fair value of approximately $ 3.4 million. The note was fully satisfied as of December 31, 2023. The Company did no t make any payments on the first, second, third, or fourth tranches of the Third Investor D Note or Fourth Investor D Note during the year ended December 31, 2023. For the purposes of defining the collection of the various agreements and instruments by and between Investor D and the Company: • The Investor D SPA, First Amended Investor D SPA, and Second Amended Investor D SPA are referred to as the “Original and Amended Investor D SPA”. 94 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 • All Investor D Notes issued and/or amended under the Original and Amended Investor D SPA are collectively referred to as the “Investor D Convertible Notes”. All warrants issued under the Original and Amended SPA or Letter Agreement are collectively referred to as the “Investor D Convertible Note Warrants”. Investor D Unsecured Convertible Notes Issued in 2024 The Company completed additional closings related to the Second Amendment to the Investor D Securities Purchase Agreement on January 12, 2024, and January 24, 2024, issuing notes in principal amounts of $ 0.3 million and $ 0.8 million, respectively, each at 7.00 % per annum (collectively the “2024 Investor D Notes”). The 2024 Investor D Notes were to mature on April 12, 2025 and April 24, 2025 , respectively. The 2024 Investor D Notes had an initial conversion price of $ 350.00 per share and were convertible into shares of the Company’s common stock, beginning on the earlier of June 11, 2024 (or earlier upon mutual written agreement of the Company and the purchaser), or the date of an event of default. The Company also issued warrants to purchase up to 5,278 and 15,382 shares of common stock, respectively, with an exercise price of $ 14.00 per share, and additional warrants to purchase up to 5,278 and 15,382 shares of common stock, respectively, with an exercise price of $ 350.00 per sha re. On January 30, 2024, the institutional investor agreed to waive its Optional Redemption Rights and any event of default that may arise thereunder with respect to this offering and suspend the Optional Redemption Rights for a period of sixty ( 60 ) days following the closing of this offering (the “Suspension Period”), and the Company granted the institutional investor a right to redeem all or a portion of the then outstanding Conversion Amount within three (3) trading days after the Suspension Period at an amount equal to 200 % of the Conversion Amount. During the quarter-ended March 31, 2024, the institutional investor converted approximately $ 3.3 million (face value) of the outstanding convertible notes into approximately $ 9.5 million of the Company’s common stock. As of March 31, 2024, the Company still owed the institutional investor approximately $ 1.0 million (face value) in convertible notes, with a fair value of approximately $ 1.1 million, which as disclosed below, was ultimately either converted or redeemed by June 30, 2024. The Company incurred a loss of approximately $ 5.8 million as a result of the following: (i) $ 4.7 million loss on conversion into equity as a result of the difference between the fair value of the convertible notes being converted and the equity being delivered, (ii) $ 0.7 million loss on issuance of the Investor D convertible notes issued during the quarter ended March 31, 2024, as a result of the combination of the fair value of detachable warrants issued in conjunction to the Investor D Notes issues during the quarter ended March 31, 2024, and the excess fair value over the proceeds received for the Investor D convertible notes issues during the quarter ended March 31, 2024, and (iii) $ 0.4 million loss on the change in fair value of those Investor D convertible notes that were still outstanding as of March 31, 2024. Investor D April 2024 Side Letter On April 1, 2024, the Company and Investor D entered into a side letter agreement (the “April 2024 Side Letter”) whereby each party agreed to suspend certain rights of Investor D for a 60-day period, extending those rights from March 30, 2024, to May 30, 2024. Those rights included a 10-day notice period for any subsequent financing and rights to review terms of such financing arrangements. Finally, Investor D waived its rights and notice of default in the event of such financings. In addition, if at the end of the suspension period of May 30, 2024 the convertible notes were still outstanding, Investor D had the right to require the Company to redeem all or a portion of any outstanding Investor D convertible notes at 200 % of the conversion amount (the “Make-Whole Amount”). On June 5, 2024, Investor D and the Company completed the following two transactions, eliminating the remaining outstanding convertible debt: • Investor D converted approximately $ 0.6 million of outstanding principal and $ 0.7 million of accrued interest and Make-Whole Amount , into 92,858 shares of the Company’s common stock, resulting in a loss of approximately $ 0.4 million, and 95 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 • The Company paid the remaining $ 0.7 million of outstanding convertible debt and Make-Whole Amount. Accounting for the Investor D Convertible Notes and Investor D Convertible Note Warrants The Company concluded that for each Investor D Convertible Note issuance, which included two legally detachable and separately exercisable freestanding financial instruments, (i) the Investor D Convertible Notes and (ii) the Investor D Convertible Note Warrants. The Company concluded that the Investor D Convertible Note Warrants should be recorded as a liability (see Note 10). The Company determined the Investor D Convertible Notes are liability instruments under ASC 480, Distinguishing Liabilities from Equity . The Investor D Convertible Notes were then evaluated in accordance with the requirements of ASC 825, and it was concluded that the Company was not precluded from electing the FVO for the Investor D Convertible Notes. As such, the Investor D Convertible Notes are carried at fair value in the consolidated balance sheets. The Investor D Convertible Notes were measured at fair value each reporting date until they were satisfied with changes in fair value recognized in the consolidated statements of operations, unless the change was concluded to be related to the changes in the Company’s credit rating, in which case the change would have been recognized as a component of accumulated other comprehensive income in the consolidated balance sheets. As the fair value option under ASC 825 was elected, the Company does not recognize interest expense, but instead the change in fair value at each reporting period is impacted by either the accrual or payment of interest. Note 9. Equity Transactions January 2024 Offering On January 26, 2024, the Company entered into a Securities Purchase Agreement with a single institutional investor, pursuant to which the Company issued to the investor (the “Q1 2024 SPA”), (i) in a registered direct offering, 252,182 shares of the Company’s common stock, par value $ 0.0001 per share, and pre-funded warrants to purchase 181,449 shares of Common Stock (the “Pre-Funded Warrants”) with an exercise price of $ 0.0001 per share, and (ii) in a concurrent private placement, series A warrants to purchase 433,631 shares of common stock (the “Series A Common Warrants”) and series B warrants to purchase 216,816 shares of common stock each with an exercise price of $ 20.76 (the "Series B Common Warrants" and together with the Series A Common Warrants, the “Investor E Warrants”). Such registered direct offering and concurrent private placement are referred to herein as the “January 2024 Offering". The January 2024 Offering was priced at-the-market consistent with the rules of the Nasdaq Stock Market. The Company received aggregate gross proceeds from the January 2024 Offering of approximately $ 9.0 million, before deducting fees to the Maxim Group LLC and other offering expenses payable by the Company. The Investor E Warrants became exercisable on June 4, 2024 , the effective date of stockholder approval for the issuance of the shares of common stock issuable upon exercise of the Investor E Warrants (the “Stockholder Approval Date”). The Series A Common Warrants will expire on the fifth anniversary of the Stockholder Approval Date and the Series B Common Warrants will expire on the twelve-month anniversary of the Stockholder Approval Date. The Pre-Funded Warrants will not expire and were exercisable commencing on January 26, 2024. All Pre-Funded Warrants were exercised during the quarter ended March 31, 2024. The Company paid approximately $ 0.7 million in fees to Maxim Group LLC and issued 21,682 warrants (the “PA Warrants”) to purchase shares of the Company’s common stock, with a fair value of approximately $ 0.3 million at issuance. The exercise price of these warrants is $ 22.83 per share and the warrants become exercisable on July 30, 2024 , expiring five years after the closing date. July 2024 Offering On July 10, 2024, the Company entered into a securities purchase agreement (the “Q3 2024 SPA”) with certain institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market consistent with the rules of the Nasdaq Stock Market: (i) 947,868 shares of the Company’s common stock, $ 0.0001 par value per share and (ii) Common Stock purchase warrants to purchase up to 947,868 shares of Common Stock (the “July 2024 Investor Warrants”) in a concurrent private placement (together the “July 2024 Offering”). The July 2024 Investor Warrants were immediately exercisable, expire five years following the issuance date and have an exercise price of $ 10.55 per share. The Company agreed to register the shares of Common Stock underlying the Common Warrants within 30 days of 96 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 the date of the Purchase Agreement. The combined purchase price of each share of Common Stock and July 2024 Investor Warrant is $ 10.55 . The gross proceeds to the Company from the Offering were approximately $ 10.0 million, before deducting placement agent fees and other offering expenses payable by the Company. On May 17, 2024, the Company entered into an engagement letter with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright agreed to serve as the exclusive placement agent for the Company, on a reasonable best-efforts basis, in connection with the offering. The Company paid Wainwright an aggregate cash fee equal to (i) 6.4 % and 1 % management fee of the gross proceeds of the July 2024 Offering and (ii) for certain expenses incurred by Wainwright totaling approximately $ 0.8 million. Additionally, the Company has agreed to issue to Wainwright or its designees as compensation, warrants to purchase up to 66,351 shares of Common Stock, equal to 7.0 % of the aggregate number of Shares placed in the Offering (the “July 2024 PA Warrants”, which combined with the July 2024 Investor Warrants are herein referred to as the “July 2024 Warrants”). The Placement Agent Warrants have a term of five years from the commencement of sales under the Offering and an exercise price of $ 13.1875 per share of Common Stock (equal to 125 % of the offering price). August 2024 At-The-Market Offering On August 20, 2024, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”) with Wainwright as sales agent, to sell shares of its common stock, from time to time, through an “at the market offering” program under which Wainwright acts as sales agent. The sales of the Company’s Common Stock made under the ATM Agreement to be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through the Nasdaq Capital Market or on any other existing trading market for the Company’s common stock (the “ATM”). Through December 31, 2024, the Company raised approximat ely $ 0.1 million utilizing the ATM, issuing 12,218 shares of the Company’s Common Stock. Tumim Equity Line of Credit In August 2022, the Predecessor, LMAO, and Tumim Stone Capital LLC (“Tumim”) entered into an equity line financing arrangement through a Common Stock Purchase Agreement (“Purchase Agreement”) providing the right to sell Tumim up to $ 100 million worth of shares of common stock. The Purchase Agreement is subject to certain limitations and conditions and provided for a $ 2.5 million commitment fee payable to Tumim, of which $ 1.5 million was paid in cash in 2022 and 2023 and $ 1.0 million was paid by issuing 8,730 shares of common stock to Tumim in 2023. During the year ended December 31, 2023, the Company sold 260,000 shares of common stock to Tumim for proceeds of approximately $ 4.7 million as part of the Purchase Agreement. As of December 31, 2023, approximately $ 95.3 million was available to be drawn. In February 2024, the Company and Tumim agreed to terminate the Purchase Agreement. 97 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Note 10. Warrants The Company has the following warrants outstanding at December 31, 2024 and 2023: 2024 2023 Liability Classified Warrants Investor D Warrants — 254,732 Private Placement Warrants 229,520 229,520 PIPE Investor Warrants 20,000 20,000 Subtotal 249,520 504,252 Equity Classified Warrants Investor E Warrants 650,446 — July 2024 Warrants 1,014,219 — Placement Agent Warrants 21,682 — Public Stockholders' Warrants 422,000 422,000 Legacy Warrants 1,957 1,957 Subtotal 2,110,304 423,957 Grand Total 2,359,824 928,209 The following tables provides the weighted-average strike price and time to maturity for each warrant tranche as of December 31, 2024 and 2023: December 31, 2024 Warrant Share Equivalents Weighted-Average Strike Price Weighted-Average Time to Maturity Liability Classified Warrants Private Placement Warrants 229,520 $ 287.50 2.82 PIPE Investor Warrants 20,000 $ 287.50 2.82 Equity Classified Warrants Investor E Warrants 650,446 $ 20.76 4.03 July 2024 Warrants 1,014,219 $ 10.72 4.53 Placement Agent Warrants 21,682 $ 22.75 4.08 Public Stockholders' Warrants 422,000 $ 287.50 2.82 Legacy SeaStar Inc. Warrants 1,957 $ 250.00 1.38 December 31, 2023 Warrant Share Equivalents Weighted-Average Strike Price Weighted-Average Time to Maturity Liability Classified Warrants Investor D Warrants 254,732 $ 12.50 4.65 Private Placement Warrants 229,520 $ 287.50 3.82 PIPE Investor Warrants 20,000 $ 287.50 3.82 Equity Classified Warrants Public Stockholders' Warrants 422,000 $ 287.50 3.82 Legacy SeaStar Inc. Warrants 1,957 $ 250.00 2.38 98 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 July 2024 Warrants As discussed in Note 8, as part of the Q3 2024 SPA, the Company issued the following warrants to purchase the Company’s common stock to certain institutional investors and the placement agent in July 2024: • July 2024 Investor Warrants - warrants to purchase 947,868 shares of the Company’s common stock with an exercise price of $ 10.55 , expiring July 10, 2029 . • July 2024 PA Warrants - warrants to purchase 66,351 shares of the Company’s common stock, with an exercise price of $ 13.1875 , expiring July 10, 2029 . Investor E Warrants As discussed in Note 8 as part of the Q1 2024 SPA, the Company issued the following warrants to purchase the Company’s common stock to Investor E in January 2024: • Pre-Funded Warrants - warrants to purchase 181,449 shares of common stock with an exercise price of $ 0.0001 . The Pre-Funded Warrants had no expiration date and were exercisable commencing on the date of issuance and at any time until all of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrants were exercised in full during the quarter ended March 31, 2024. • Series A and Series B Common Warrants - in a concurrent private placement, Series A Common Warrants to purchase 433,631 shares of Common Stock and Series B Common Warrants to purchase 216,816 shares of common stock each with an exercise price of $ 20.76 . • PA Warrants – in a concurrent private placement, PA Warrants to purchase 21,682 shares of common stock with an exercise price of $ 22.83 per share. Investor E Warrants became exercisable on June 4, 2024 , the effective date of stockholder approval for the issuance of the shares of common stock issuable upon exercise of the Investor E Warrants. The Series A Common Warrants will expire on June 4, 2029 , and the Series B Common Warrants will expire on June 4, 2025 . Maxim Group LLC (“Maxim”) acted as the placement agent in connection with the transactions pursuant to the Placement Agency Agreement, dated January 26, 2024, by and between the Company and Maxim. On January 30, 2024, Maxim received warrants to purchase 21,682 shares of common stock covering a number of shares equal to 5 % of the total number of shares of common stock sold in the Transactions. The PA Warrants became exercisable six months after the closing and will expire on January 30, 2029 . The PA Warrants are exercisable at $ 22.83 per share. In accordance with ASC 815-40, Derivatives and Hedging-Contracts in Entity’s own Equity , the Company determined the Investor E and July 2024 Warrants meet the conditions for equity classification and are included on the consolidated balance sheets as a component of stockholders’ equity (deficit). Investor D Warrants As disclosed in Note 8, the following summarizes warrants issued in connection with the Original and Amended Investor D SPA during the year ended December 31, 2023: • On March 15, 20 23, as part of the issuance of the First Investor D Note, 13,134 warrants were issued with an exercise price of $ 74.25 per share. • On May 12, 2023, as part of the issuance of the Second Investor D Note, 8,756 warrants were issued with an exercise price of $ 74.25 per share. 99 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 • On August 7, 2023, as part of the Letter Agreement, 19,061 warrants were issued with an exercise price of $ 5.00 per share. Also on August 7, 2023, as part of the issuance of the first tranche of the Third Investor D Note, 29,552 Convertible Note Warrants were issued with an exercise price of $ 5.00 per s hare. • On August 30, 2023, as part of the issuance of the second tranche of the Third Investor D Note, 29,552 warrants were issued with an exercise price o f $ 5.00 per share. • On September 26, 2023, as part of the issuance of the third tranche of the Third Investor D Note, 29,552 warrants were issued with an exercise price of $ 5.00 per share. • On November 27, 2023, as part of the issuance of the fourth tranche of the Third Investor D Note, 29,552 warrants were issued with an exercise price of $ 5.00 per share. • On December 11, 2023, in connection with the Second Amended Investor D SPA, and as a result the Fourth Investor D Note, the Company issued two warrants, each to purchase up to 21,108 shares of common stock with an exercise price of $ 350.00 per share. • The Company, in conjunction with additional borrowing of convertible debt related to the Second Amendment to the Investor D SPA on January 12, 2024 and January 24, 2024, issued warrants to purchase up to 5,277 and 15,831 shares of common stock, respectively, with an exercise price of $ 350.00 per share, and additional warrants to purchase up to 5,277 and 15,831 shares of common stock, respectively, with an exercise price of $ 350.00 per share. • The Company, in conjunction with additional borrowing of convertible debt related to the Second Amendment to the Investor D SPA on January 12, 2024 and January 24, 2024, issued warrants to purchase up to 5,277 and 15,831 shares of common stock, respectively, with an exercise price of $ 350.00 per share, and additional warrants to purchase up to 5,277 and 15,831 shares of common stock, respectively, with an exercise price of $ 350.00 per share. The Investor D Warrants expired five years from their issuance date and contained cashless exercise provisions. The Company did not have the ability to redeem the warrants. In 2024, 17,025 of the Investor D Warrants were converted into shares at an exercise price of $ 5.00 . All remaining Investor D Warrants issued in connection with the Investor D SPA were exchanged for a short-term note payable of approximately $ 0.5 million on June 28, 2024, eliminating all Investor D Warrants, and recognizing a gain of approximately $ 1.3 million. The Investor D Warrants were determined to be liability classified. The initial fair value of the convertible note warrants was determined using a Black-Scholes option pricing model, which considers variables such as estimated volatility, time to maturity, and the risk-free interest rate. The risk-free interest rate is the U.S. Treasury rate at the date of issuance, and the time to maturity is based on the contractual life at the date of issuance, which was five years. Subsequent changes in fair value were recognized through earnings at each reporting period end-date or settlement date. Legacy SeaStar Inc. Warrants Prior to the Business Combination, the Predecessor had outstanding warrants to purchase shares of the Predecessor’s preferred stock which had been issued in conjunction with various debt financings. Upon effectiveness of the Business Combination, 2,318 outstanding warrants were converted into 2,789 warrants to purchase common stock of SeaStar Medical Holding Corporation (“Legacy SeaStar Inc. Warrants”) at their previous exercise prices. Public Stockholders’ Warrants As part of LMAO’s initial public offering, under the Warrant Agreement dated as of January 25, 2021 and, prior to the effectiveness of the Business Combination, LMAO issued 414,000 warrants each of which entitled the holder to 100 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 purchase one share of common stock at an exercise price of $ 287.50 per share (“Public Stockholders’ Warrants”). Upon the effectiveness of the Business Combination, the outstanding Public Stockholders’ Warrants automatically converted into warrants to purchase common stock of the Company. The Company has the ability to redeem outstanding Public Stockholders’ Warrants at any time after they become exercisable and prior to their expiration, at a price of $ 0.25 per warrant, provided that the last reported sales price of our common stock equals or exceeds $ 450.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and the like) for any 20 trading days within a 30 day trading-day period. Private Placement Warrants Simultaneously with the closing of the Initial Public Offering, LMAO completed the private sale of 229,520 million warrants each of which entitled the holder to purchase one share of common stock at an exercise price of $ 287.50 per share, to LMF’s sponsor (“Private Placement Warrants”). Upon the effectiveness of the Business Combination, the outstanding Private Placement Warrants automatically converted into warrants of SeaStar Medical Holding Corporation. The Company does not have the ability to redeem the Private Placement Warrants. 2022 PIPE Investor Warrants On October 28, 2022, the Company entered into a Private Investment in Public Equity (“PIPE”) Agreement, pursuant to which the PIPE investors purchased an aggregate of 28,000 shares of common stock at $ 250.00 per share and received 28,000 PIPE Investor Warrants (“PIPE Investor Warrants”), which entitled the holder to purchase one share of common stock of SeaStar Medical Holding Corporation for $ 287.50 per share, for an aggregate purchase price of approximately $ 7.0 million. Below is the warrant activity for the year ended December 31, 2024: Investor D Warrants Investor E (January 2024) Warrants July 2024 Warrants Placement Agent Warrants Private Placement Warrants PIPE Investor Warrants Public Stockholders' Warrants Legacy Warrants Outstanding as of December 31, 2023 254,732 — — — 229,520 20,000 422,000 1,957 Issuance 42,217 831,895 1,014,219 21,682 — — — — Exercised ( 170,625 ) ( 181,449 ) — — — — — — Forfeited / cancelled — — — — — — — — Exchanged for Investor D Note ( 126,324 ) — — — — — — — Outstanding as of December 31, 2024 — 650,446 1,014,219 21,682 229,520 20,000 422,000 1,957 Note 11. Common Stock and Preferred Stock As of December 31, 2024, the Company is authorized to issue 510,000,000 shares, consisting of (a) 500,000,000 shares of common stock and (b) 10,000,000 shares of preferred stock (the “Preferred Stock”). On November 26, 2024, the Company’s shareholders voted at a Special Meeting to reduce the authorized shares of common stock to 450,000,000 . The change became effective on January 27, 2025. Common stock The charter of the Company (the “Charter”) provides the following with respect to the rights, powers, preferences, and privileges of the common stock. 101 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Voting power Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of common stock possess all voting power for the election of the Company’s directors and all other matters requiring stockholder action. Holders of common stock are entitled to one voter per share on matters to be voted on by stockholders. The Charter does not provide for cumulative voting rights. Dividends Subject to the rights, if any, of the holders of any outstanding shares of preferred stock, under the Charter, holders of common stock will be entitled to receive such dividends, if any, as may be declared from time to time by the Board of Directors in its discretion out of funds legally available therefor. Liquidation, dissolution and winding-up In the event of the Company’s voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of the common stock will be entitled to receive an equal amount per share of all of the Company’s assets of whatever kind available for distribution to stockholders after the rights of the holders of the Preferred Stock have been satisfied and after payment or provision for payment of the Company’s debts. Preemptive or other rights There are no preemptive rights or sinking fund provisions applicable to the shares of the Company’s common stock. Preferred stock The Charter provides that shares of preferred stock may be issued from time to time in one or more series. The Board of Directors is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional, or other special rights and any qualifications, limitations, and restrictions thereof, applicable to the shares of each series. The Company has no preferred stock outstanding at December 31, 2024 or 2023. Note 12. Stock-Based Compensation Awards The following table sets forth the total stock-based compensation cost included in the Company’s consolidated statements of operations for the years ended December 31, 2024 and 2023: ($ in thousands) 2024 2023 Research and development $ 157 $ 160 General and administrative (*) 730 292 Total $ 887 $ 452 (*) - Includes approximately $ 72,000 in stock bonuses pursuant to the 2022 Omnibus Incentive Plan. Equity incentive plan - summary 2022 Omnibus Incentive Plan The Company’s Board of Directors adopted, and the shareholders approved the 2022 Omnibus Incentive Plan to provide long-term incentive for its employees and non-employee service providers. The vesting of stock options is stated in each individual grant agreement, which is generally either one or four years . Options granted expire 10 years after the date of grant. 102 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 2019 Stock Incentive Plan The Company’s Board of Directors adopted the 2019 Stock Incentive Plan on February 25, 2019, to provide long-term incentive for its employees and non-employee service providers. The Stock Incentive Plan was terminated on October 28, 2022, and no further awards were granted under such plan. Stock Options Option activity for the year ended December 31, 2024, is as follows: 2022 Omnibus Incentive Plan - Options Weighted Weighted Average Average Total Remaining Exercise Intrinsic Contractual ($ in thousands) Options Price Value Life (Years) Outstanding as of December 31, 2023 14,045 $ 46.00 $ — 9.3 Exercised — Issued — Forfeited / cancelled ( 931 ) Outstanding as of December 31, 2024 13,114 $ 46.00 $ — 8.5 Vested and exercisable as of December 31, 2024 13,114 $ — $ — 8.5 2019 Stock Incentive Plan - Options Weighted Weighted Average Average Total Remaining Exercise Intrinsic Contractual ($ in thousands) Options Price Value Life (Years) Outstanding as of December 31, 2023 9,797 $ 46.00 $ — 6.7 Exercised — Issued — Forfeited / cancelled ( 980 ) Outstanding as of December 31, 2024 8,817 $ 46.00 $ — 5.9 Vested and exercisable as of December 31, 2024 8,503 $ 46.00 $ — 5.9 Restricted Stock Units A summary of the Company’s restricted stock unit (“RSU”) activity for the year ended December 31, 2024, is as follows: 2022 Omnibus Incentive Plan - RSUs Restricted Stock Units Weighted Average Grant Date Fair Value (per share) Outstanding as of December 31, 2023 9,361 $ 36.75 Granted 219,500 Vested ( 9,183 ) Forfeited / cancelled ( 178 ) Outstanding as of December 31, 2024 219,500 $ 5.09 103 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 2019 Stock Incentive Plan - RSUs Restricted Stock Units Weighted Average Grant Date Fair Value (per share) Outstanding as of December 31, 2023 3,698 $ 200.00 Granted — Vested ( 2,529 ) Forfeited / cancelled ( 422 ) Outstanding as of December 31, 2024 747 $ 200.00 Note 13. Commitments and Contingencies License and distribution agreement On December 27, 2022, the Company entered into a license and distribution agreement (“the Distribution Agreement”) with Nuwellis, Inc., appointing Nuwellis as the exclusive distributor to promote, advertise, market, distribute and sell the SCD in the United States. The Company received a potentially refundable upfront payment of $ 0.1 million on January 3, 2023. The Company also received milestone payments in the amount of approximately $ 0.5 million for obtaining FDA approval . The term of the Distribution Agreement was for three years . The Distribution Agreement was amended in December 2023, removing the potential to require refund of the $ 0.1 million up-front payment by licensee to the Company, while extending certain milestone payment owed to the Company upon certain regulatory achievements. In May 2024, the Company provided notice to Nuwellis that Nuwellis had breached the Distribution Agreement and that the Distribution Agreement would terminate effective August 18, 2024. Nuwellis disputed the validity of the termination and on October 20, 2024, the Company entered into a confidential settlement agreement and release with Nuwellis, pursuant to which the Company agreed to pay Nuwellis an aggregate of $ 900 thousand, payable in three installments through December 31, 2024. The Company paid the first installment of $ 500 thousand on October 22, 2024, with the final payment of $ 0.2 million on December 31, 2024. As of December 31, 2024, the Company had fulfilled all of its obligations to Nuwellis. Lease agreements The Company is part of a membership agreement for shared office space and can cancel at any time, consisting of office space and new to 2024, dedicated space for warehousing and assembly of SCDs. Rent expense was approximately $ 43 thousand and $ 32 thousand for the years ended December 31, 2024 and 2023. Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. In connection with the Business Combination, LMAO proposed, for stockholder approval, various amendments to its Amended and Restated Certificate of Incorporation, which included among other things a proposal to increase the authorized shares of common stock. A purported stockholder sent a Stockholder Litigation Demand letter (the “Demand”) to the Board of Directors of LMAO alleging that the Delaware General Corporation Law required a separate class vote of the Class A common stockholders to increase the authorized shares of common stock. Following receipt of the Demand, the Company canceled and withdrew the proposal to increase the authorized shares of common stock. The stockholder’s counsel thereafter demanded that the Company pay counsel fees for the purported benefit conferred upon the Company’s shareholders by causing the Company to withdraw the allegedly invalid proposal to increase the authorized shares of common stock. The Company paid approximately $ 0.2 million fo r a legal settlement during the year ended December 31, 2023. 104 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 On July 5, 2024, Forrest A K Wells (the “Plaintiff”), a purported stockholder of the Company, filed a putative class action complaint in the United States District Court for the State of Colorado, captioned Wells v. SeaStar Medical Holding Corporation et al, Case No. 1:24-cv-0187 (D. Colorado) (the “Class Action”). The Class Action alleges that the Company, its Chief Executive Officer and former Chief Financial Officer made or caused to be made material misstatements or omissions regarding the Company’s business and operations, allegedly culminating in the Company’s restatement of its consolidated financial statements, disclosed in a Form 8-K and filed on March 27, 2024. The Class Action asserts claims pursuant to the Securities Exchange Act of 1934, including Section 10(b), Rule 10b-5 promulgated thereunder and Section 20(a). The Class Action seeks to recover, among other remedies, compensatory damages. On March 4, 2025, the Plaintiff filed an amended complaint. The Company intends to vigorously defend the action. On December 13, 2024, Jose Lazo, a purported stockholder of the “Company, filed a putative stockholder derivative action complaint captioned Lazo v. Schlorff et. al., C.A. No. 1:24-cv-3444 in the United States District Court for the District of Colorado (the “Derivative Action”). The factual allegations of the Derivative Action are substantially similar to the Class Action. On January 30, 2025, upon joint motion of the parties, the Court stayed the Derivative Action pending the Court’s resolution of an anticipated motion to dismiss to be filed in the Class Action. Note 14. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified into the following hierarchy: Level 1 – quoted prices in active markets for identical assets and liabilities. Level 2 – other significant observable inputs (including quoted prices for similar assets and liabilities, interest rate, credit risk, etc.). Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities). The fair value of the forward option on prepaid forward contracts, convertible notes, and the warrants liability is classified as Level 3 in the fair value hierarchy. Fair Value Measurement Hierarchy The following table presents the Company’s financial assets and/or liabilities that were accounted for at fair value on a recurring basis as of December 31, 2024 and 2023, by level withing the fair value hierarchy. There were no non-recurring fair value measurements, as the Company does not have any long-lived assets, including fixed assets, intangible assets or goodwill which can require non-recurring measurements for impairment. 105 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Fair Value Measurements at December 31, 2024 Fair Value at December 31, 2024 (Level 1) (Level 2) (Level 3) Liabilities: Liability classified warrants $ 33 $ — $ — $ 33 $ 33 $ — $ — $ 33 Fair Value Measurements at December 31, 2023 Fair Value at December 31, 2023 (Level 1) (Level 2) (Level 3) Liabilities: Convertible notes $ 4,179 $ — $ — $ 4,179 Liability classified warrants 2,307 — — 2,307 Total $ 6,486 $ — $ — $ 6,486 Summary of Level 3 Input Changes The following table presents the changes in the forward option-prepaid forward contracts, convertible notes measured at fair value, warrants liability, and the notes derivative liability for the years ended December 31, 2024 and 2023 (in thousands): Forward Purchase Agreement Derivative Liability Classified Level 3 Rollforward ($ in thousands) Liability Convertible Notes Warrants Balance January 1, 2023 $ 10,211 $ — $ 587 Additions — 4,855 3,325 Payments — ( 400 ) — Shares issued as payments ( 11,519 ) ( 10,411 ) — Changes in fair value 1,308 5,380 ( 545 ) Warrant expense — 4,949 — Warrants exercised — — ( 1,060 ) Balance December 31, 2023 $ — $ 4,373 $ 2,307 Additions — 501 586 Payments — ( 700 ) — Shares issued as payments — ( 4,922 ) ( 3,107 ) Changes in fair value — 748 697 Exchange for short-term note payable — — ( 450 ) Balance December 31, 2024 $ — $ — $ 33 Level 3 Inputs For assets or liabilities for which the Company is required to remeasure the fair value on a recurring basis at each reporting date, generally the Company is required to disclose certain quantitative data related to the inputs used at the most recent reporting period date. However, for those assets or liabilities for which the Company has elected to take the FVO in accordance with ASC 825, Financial Instruments , then such quantitative disclosures are not required. Liability Classified Warrants 106 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Significant assumptions used in valuing warrants which require liability classification were as follows as of December 31, 2024 and 2023: December 31, December 31, 2024 2023 (&) Minimum Maximum Expected volatility 130.00 % 85.00 % 90.00 % Equivalent term 2.825 4.04 4.65 Risk-free rate 4.27 % 3.84 % 3.90 % Dividend yield 0.00 % 0.00 % 0.00 % Stock price $ 1.94 $ 0.44 $ 0.44 Strike price $ 287.50 $ 0.50 $ 11.50 (&) - the only liability classified warrants that were outstanding as of December 31, 2024, were the Private and PIPE warrants. These warrants are valued using the same inputs into a black-scholes standard option pricing model and therefore, there is no range of inputs. Note 15. Income Taxes The Company recorded approximately $ 3 thousand and $ 0 of current income tax expense for the years ended December 31, 2024 and 2023, respectively. The effective income tax rate of the Company’s provision for income taxes differed from the federal statutory rate as follows: Year Ended December 31, ($ in thousands) 2024 2023 Federal tax at statutory rate 21.00 % 21.00 % State income tax ( 3.12 )% 3.26 % R&D tax credit 0.79 % 0.65 % Stock compensation expense ( 0.07 )% ( 0.26 )% Interest on convertible notes 0.00 % ( 0.87 )% Unrealized gains and losses, net, for liability classified warrants ( 0.59 )% 0.29 % Unrealized gains and losses, net, for convertible debt ( 5.20 )% ( 8.24 )% Realized gains and losses, net, for extinguishment of convertible debt 0.00 % ( 2.09 )% Adjustment to prior period federal deferred tax assets ( 0.38 )% 4.55 % Non-deductible expenses ( 0.03 )% ( 0.02 )% Other ( 0.68 )% 0.00 % Change in valuation allowance ( 11.72 )% ( 18.27 )% Total effective income tax rate 0.00 % 0.00 % 107 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 Significant components of deferred tax assets for federal and state income taxes were as follows: December 31, December 31, ($ in thousands) 2024 2023 Deferred tax assets: Net operating losses $ 23,936 $ 21,911 Finance charges and origination fees 133 602 Accrued compensation 314 232 Stock-based compensation 47 83 Section 174 research and development capitalization 2,771 1,642 Capitalized start-up fees 209 231 Tax credits 1,103 903 Total deferred tax assets 28,513 25,604 Valuation allowance ( 28,513 ) ( 25,604 ) Net deferred tax assets $ — $ — In accordance with U.S. GAAP, a valuation allowance should be provided if it is more likely than not that some or all of the Company’s deferred tax assets will not be realized. The Company’s ability to realize the benefit of its deferred tax assets will depend on the generation of future taxable income. Due to the uncertainty of future profitable operations and taxable income, the Company has recorded a full valuation allowance against its net deferred tax assets. For the years ended December 31, 2024 and 2023, the net increase in the valuation allowance was approximately $ 2.8 m illion and $ 4.8 million, respectively. As of December 31, 2024 and 2023, the Company had federal net operating loss carryforwards of approximately $ 108.4 million and $ 106.5 million, respectively, of which approximately $ 55.3 million of federal net operating loss carryforwards post 2017 will be carried forward indefinitely. The remaining $ 52.8 million of federal net operating loss carryforwards begin expiring in 2027 . The Company has also generated approximately $ 8.9 million of net operating loss carryforwards in California in 2019 and carryforward for 20 years , $ 2.9 million of Florida net operating losses that carryforward indefinitely ; $ 4.5 million of Illinois net operating loss carryforwards that carryforward for 20 years and $1 .3 million of net operating loss carryforwards in Virginia that carryforward indefinitely . The Company has not used any net operating loss carryforwards to date. The Company has not claimed any federal or state Research Credit carryforwards pre-2022. The Company believes that the Company has qualified research activities and qualified research expenses, but missed claiming the R&D credits in prior years. The tax provision reports no pre-2022 R&D credit carryforwards, consistent with the tax return filings through 2021. The Company will record R&D credit deferred tax assets (and the related valuation allowance) if/when the Company amends prior year tax filings to claim R&D credits. The Company had federal energy credit carryforwards of approximately $ 0.6 million as of December 31, 2024 and 2023, which will expire starting in 2027 if not utilized. The Company has federal research and development credit carryforwards of approximately $ 0.5 million and $ 0.3 million as of December 31, 2024 and 2023, respectively, which will expire starting in 2042 if not utilized. Pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383, the Company’s ability to use net operating losses (“NOL”) and research tax credit carryforwards to offset future taxable income may be limited if the Company experiences a cumulative change in ownership of more than 50 % within a three-year testing period. The Company has not completed an ownership change analysis pursuant to IRC Section 382. If ownership changes within the meaning of IRC Section 382 are identified as having occurred, the amount of NOL and research tax credit carryforwards available to offset future taxable income and income tax liabilities in future years may be significantly restricted or eliminated. Further, deferred tax assets associated with such NOLs, and research tax credits could be significantly reduced upon realization of an ownership change within the meaning of IRC Section 382. 108 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 The Company files U.S. federal and state tax returns with varying statutes of limitations. Due to net operating loss and credit carryforwards, the 2019 to 2024 tax years remain subject to examination by the U.S. federal and some state authorities. The actual amount of any taxes due could vary significantly depending on the ultimate timing and nature of any settlement. Uncertain Tax Benefits The Company uses the “more likely than not” criterion for recognizing the income tax benefit of uncertain income tax positions and establishing measurement criteria for income tax benefits. As of December 31, 2024, the Company has approximately $ 0.9 thousand of uncertain tax benefits, all of which are accounted for as contra deferred tax assets. The following schedule provides the roll forward of the Company’s uncertain tax positions in 2024: ($ in thousands) Uncertain Tax Position Balance as of December 31, 2023 $ 110 Increase due to previously unrecognized tax benefits from prior years 749 Increase due to current year unrecognized tax benefits 85 Balance as of December 31, 2024 $ 944 The increase in the prior year uncertain tax position relates to Colorado net operating losses as it is more likely than not that the Colorado apportionment percentage was overstated in prior years. The Company has no accrued interest related to the uncertain tax benefits. The Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months as of December 31, 2024. Note 16. Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, including vested restricted stock units for which common shares have not yet been issued, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the warrants, common stock options, and unvested restricted stock units are considered to be potentially dilutive securities. As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for all periods. The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive: 2024 2023 Investor E (January 2024) warrants 650,446 — July 2024 Warrants 1,014,219 — Placement Agent warrants 21,682 — Public Stockholders̕ warrants 422,000 414,000 Private Placement warrants 229,520 229,520 PIPE Investor warrants 20,000 28,000 Legacy warrants 1,957 2,789 Convertible Note warrants — 106,493 Options to purchase common stock 21,617 20,178 Unvested restricted stock units 220,247 10,261 Total 2,601,688 811,242 The following table presents the calculation of basic and diluted net loss per share (in thousands except share and per share information): 109 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 ($ in thousands except share and per share amounts) 2024 2023 Net loss $ ( 24,830 ) $ ( 26,232 ) Weighted-average shares outstanding - basic and diluted 3,743,554 866,813 Basic and diluted net loss per share $ ( 6.63 ) $ ( 30.26 ) Note 17. Segment Reporting The Company is comprised of a single reportable segment, its Device Segment. This organizational structure aligns with how our Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, manages the Company’s business, including resource allocation and performance assessment. The Company is focused entirely on the development, regulatory approval and commercialization of the Company’s adult and pediatric Selective Cytopheretic Devices (SCDs). The Company had a total of 19 employees at December 31, 2024, and total assets of $ 4.7 and $ 3.5 million, as of December 31, 2024 and 2023, respectively. For segment reporting purposes, the CODM uses operating profit/(loss) to evaluate segment performance and allocate resources. As a Company that only recently began limited commercial sales of QUELIMMUNE, the CODM is primarily focused on evaluating the overall spending for research and development activities needed to fund further development of the SCDs, and general and administrative activities incurred to support the research and development activities of the Company. Accounting policies associated with the Company’s sole segment are the same as those described in Note 1. All of the Company’s sales are located within the United States. As of the date of this report, the Company has obtained regulatory approval for commercial sales in the U.S. of QUELIMMUNE from the FDA. The Company does not have any inter-entity sales or transfers. The following table represents the Company’s sole segment’s operating results for the years ended December 31, 2024 and 2023, respectively. Year Ended December 31, 2024 2023 Net Revenue $ 135 $ — Cost of goods sold — — Gross profit $ 135 $ — Operating expenses Research and development 9,105 5,973 General and administrative 8,872 8,237 Total operating expenses $ 17,977 $ 14,210 Loss from operations $ ( 17,842 ) $ ( 14,210 ) Non-operating expenses (*) ( 6,985 ) ( 12,022 ) Net loss before taxes $ ( 24,827 ) $ ( 26,232 ) (*) - Non-operating expenses consist of interest expense, interest income, and gains and losses from changes in the fair value of liability classified financial instruments such as warrants and convertible debt. Note 18. Subsequent Events At-the-Market Offering From January 2, 2025 through January 30, 2025, the Company raised approximately $ 0.9 million gross proceeds ($ 0.9 net of offering fees) from the sale of 483,755 shares of the Company’s common stock through its At-the-Market offering 110 SeaStar Medical Holding Corporation Notes to the Consolidated Financial Statements December 31, 2024 and 2023 program. As a result of the February 3, 2025 registered direct offering (see below), the Company cannot sell any shares under the At-the-Market offering program for a period of 60 days from the February 3, 2025. Since the initial shelf-registration in August 2024, the Company has, as of the date of this filing, raised approximately $ 5.5 million gross proceeds under the At-the-Market offering program, issuing approximately 2.3 million shares, for net proceeds of approximately $ 5.3 million. February 2025 Registered Direct Offering On January 31, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”), pursuant to which the Company issued to the Purchaser, (i) in a registered direct offering, 713,000 shares of the Company’s common stock (the “Shares”), par value $ 0.0001 per share (“Common Stock”), and pre-funded warrants to purchase 2,816,412 shares of Common Stock with an exercise price of $ 0.001 per share, and (ii) in a concurrent private placement, warrants to purchase 3,529,412 shares of Common Stock (the “Common Warrants”) with an exercise price of $ 1.70 . Such registered direct offering and concurrent private placement are referred to herein as the “February 2025 Transaction.” The offering was made without an underwriter or a placement agent and we are not paying underwriting discounts or commissions. We were required to pay to H.C. Wainwright & Co. a cash fee equal to 7.0 % of the aggregate gross proceeds in this offering and issue Wainwright warrants to purchase 247,059 shares of Common Stock at an exercise price of $ 2.125 per share (the “Placement Agent Warrants’). The Company received aggregate gross proceeds from the February 2025 Transaction of approximately $ 6.0 million, before deducting estimated offering expenses payable by the Company. Nasdaq Decision Letter As disclosed in a current report on Form 8-K on March 13, 2025 , on March 11, 2025, the Company received a decision letter (the “Letter”) from the Nasdaq Hearings Panel (the “Panel”), granting the Company’s request to continue its listing on The Nasdaq Stock Market (“Nasdaq”), subject to certain conditions. The Panel’s decision provides the Company with an exception until June 22, 2025, to demonstrate compliance with Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”), which requires a Market Value of Listed Securities of at least $ 35 million. The Panel reviewed the Company’s compliance plan, which includes the continuation of fund-raising efforts that began in 2024, and strategies for achieving long-term compliance with the MVLS Rule. As part of the conditions outlined in the Panel’s decision, the Company is required to, on or before June 22, 2025: • file a public disclosure describing the transactions undertaken to increase its equity and providing an indication of its equity following those transactions, and • provide the Panel with an update on its fundraising plans and updated income projections for the next 12 months, with all underlying assumptions clearly stated. The Company is taking steps to address the conditions outlined in the Letter and remains confident in its ability to meet all applicable requirements within the specified timeframes. 111 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.